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MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC CASE NO. 14-CV-04785-EMC
KELLOGG, HUBER, HANSEN, TODD, EVANS & FIGEL, P.L.L.C. Michael K. Kellogg (pro hac vice) Mark C. Hansen (pro hac vice) Email: [email protected] [email protected] 1615 M Street, N.W., Suite 400 Washington, D.C. 20036 Telephone: (202) 326-7900 Facsimile: (202) 326-7999 CROWELL & MORING LLP Douglas W. Sullivan (SB No. 0088136) 275 Battery Street, 23rd Floor San Francisco, CA 94111 Telephone: (415) 986-2800 Facsimile: (415) 986-2827 Attorneys for Defendant AT&T MOBILITY, LLC
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA San Francisco Division
FEDERAL TRADE COMMISSION,
Plaintiff, v.
AT&T MOBILITY LLC, a limited liability company,
Defendant.
Case No. 14-CV-04785-EMC MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC Hearing Date: March 12, 2015 Time: 1:30 p.m. Judge: Hon. Edward M. Chen
Case3:14-cv-04785-EMC Document29 Filed01/05/15 Page1 of 23
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MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC CASE NO. 14-CV-04785-EMC PAGE i
TABLE OF CONTENTS Page
TABLE OF AUTHORITIES .......................................................................................................... ii
NOTICE OF MOTION AND STATEMENT OF RELIEF SOUGHT ........................................... 1
MEMORANDUM OF POINTS AND AUTHORITIES ................................................................ 1
STATEMENT OF THE ISSUE ...................................................................................................... 1
INTRODUCTION .......................................................................................................................... 1
FACTUAL BACKGROUND ......................................................................................................... 3
A. AT&T’s MBR Program ...................................................................................................... 3
B. AT&T’s Common-Carrier Status ........................................................................................ 5
C. The FCC’s MBR Inquiry .................................................................................................... 8
D. The FTC Complaint ............................................................................................................ 8
ARGUMENT .................................................................................................................................. 9
I. AT&T Is Exempt from Section 5 of the FTC Act Because It Is a Common Carrier Subject to the Communications Act ....................................................... 9
II. The Case Law Is Consistent on the Meaning of the Exemption ....................................... 12
III. Mobile Broadband Data Service Is Already Subject to FCC Regulation ......................................................................................................................... 14
IV. The FTC Cannot Rewrite the Statute To Expand Its Own Jurisdiction ............................ 15
CONCLUSION ............................................................................................................................. 17
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MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC CASE NO. 14-CV-04785-EMC PAGE ii
TABLE OF AUTHORITIES Page
CASES
Action for Children’s Television v. FCC, 59 F.3d 1249 (D.C. Cir. 1995) ................................... 15
American Bankers Ass’n v. SEC, 804 F.2d 739 (D.C. Cir. 1986) ................................................. 17
Cellco P’ship v. FCC, 700 F.3d 534 (D.C. Cir. 2012) .................................................................... 5
City of Arlington v. FCC, 133 S. Ct. 1863 (2013) ........................................................................ 16
Comtronics, Inc. v. Puerto Rico Tel. Co., 553 F.2d 701 (1st Cir. 1977) ..................................... 15
FTC v. American Standard Credit Sys., Inc., 874 F. Supp. 1080 (C.D. Cal. 1994) ..................... 13
FTC v. CompuCredit Corp., No. 1:08-CV-1976-BBM-RGV, 2008 WL 8762850 (N.D. Ga. Oct. 8, 2008) ..................................................................................................... 13
FTC v. Miller, 549 F.2d 452 (7th Cir. 1977) ................................................................ 2, 10, 12, 13
FTC v. Saja, No. Civ-97-0666-PHX-SMM, 1997 WL 703399 (D. Ariz. Oct. 7, 1997) ...................................................................................................... 13
FTC v. Verity Int’l, Ltd.:
194 F. Supp. 2d 270 (S.D.N.Y. 2002) ............................................................................... 14
443 F.3d 48 (2d Cir. 2006) .......................................................................................... 12, 14
Louisiana Pub. Serv. Comm’n v. FCC, 476 U.S. 355 (1986) ....................................................... 17
National Fed’n of Blind v. FTC, 303 F. Supp. 2d 707 (D. Md. 2004), aff ’d, 420 F.3d 331 (4th Cir. 2005) ............................................................................................................ 13
Official Airline Guides, Inc. v. FTC, 630 F.2d 920 (2d Cir. 1980) .................................................. 13
Progressive Cellular III B-3 v. FCC, 986 F.2d 546 (D.C. Cir. 1993) ........................................... 15
Russello v. United States, 464 U.S. 16 (1983) ........................................................................ 11-12
Shook v. D.C. Fin. Responsibility & Mgmt. Assistance Auth., 132 F.3d 775 (D.C. Cir. 1998) ................................................................................................................................. 16
Sosa v. Alvarez-Machain, 542 U.S. 692 (2004) ............................................................................ 11
Textile & Apparel Grp., Am. Importers Ass’n v. FTC, 410 F.2d 1052 (D.C. Cir. 1969) ................................................................................................................ 16
United States v. Southwestern Cable Co., 392 U.S. 157 (1968) ................................................... 12
United States v. Stevenson, 215 U.S. 190, 198 (1909) ................................................................. 11
Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 2014) ......................................................................... 6, 7
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MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC CASE NO. 14-CV-04785-EMC PAGE iii
STATUTES, REGULATIONS, AND RULES
Amendments to Packers and Stockyards Act of 1921, Pub. L. No. 85-909, § 3, 72 Stat. 1749 (1958) .......................................................................................................... 11
Communications Act of 1934, 47 U.S.C. § 151 et seq.:
§ 151 .................................................................................................................................... 5, 12
§ 153(11) ......................................................................................................................... 1, 5
§ 201 et seq. ........................................................................................................................ 5
§ 332 .................................................................................................................................... 5
§ 332(c)(1) ....................................................................................................................... 1, 5
§ 503(b) ............................................................................................................................. 15
§ 1302 .................................................................................................................................. 6
Federal Trade Commission Act of 1914, § 5, 38 Stat. 717 .................................................... passim
Packers and Stockyards Act of 1921, 42 Stat. 159 ................................................................. 10, 11
Telecommunications Act of 1996, Pub. L. No. 104-104, § 706, 110 Stat. 56 ...................... 6, 7, 14
Wheeler-Lea Act, Pub. L. No. 75-447, § 3, 52 Stat. 111 (1938) ............................................ 10, 11
15 U.S.C. § 44 ............................................................................................................................. 1, 9
15 U.S.C. § 45 ................................................................................................................................. 8
15 U.S.C. § 45(a) ............................................................................................................................ 9
15 U.S.C. § 45(a)(2) ........................................................................................................ 1, 9, 10, 11
15 U.S.C. § 53(b) ............................................................................................................................ 9
28 U.S.C. § 1331 ............................................................................................................................. 9
28 U.S.C. §1337(a) ......................................................................................................................... 9
28 U.S.C. § 1345 ............................................................................................................................. 9
47 C.F.R. § 8.3 ................................................................................................................................ 7
47 C.F.R. § 8.5 (2013) .................................................................................................................... 6
Fed. R. Civ. P. 12(b)(1) ............................................................................................................. 1, 17
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MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC CASE NO. 14-CV-04785-EMC PAGE iv
ADMINISTRATIVE MATERIALS
Declaratory Ruling, Appropriate Regulatory Treatment for Broadband Access to the Internet Over Wireless Networks, 22 FCC Rcd 5901 (2007) ........................................ 5
“Neutral on Internet Neutrality: Should There Be a Role for the Federal Trade Commission?,” Remarks of J. Thomas Rosch, Commissioner, FTC, Before the Global Forum 2011: Vision for the Digital Future (Nov. 7, 2011), available at http://www.ftc.gov/sites/default/files/documents/ public_statements/neutral-internet-neutrality-should-there-be-role-federal-trade-commission/111107globalforum.pdf .......................................................... 16
Order, LabMD, Inc., No. 9357, 2014 WL 253518 (F.T.C. Jan. 16, 2014) ................................... 14
Report and Order, Preserving the Open Internet, 25 FCC Rcd 17905 (2010), vacated in part, Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 2014) ................... 2, 6, 7, 14, 15
Report and Order and Further Notice of Proposed Rulemaking, Reexamination of Roaming Obligations of Commercial Mobile Radio Service Providers, 22 FCC Rcd 15817 (2007) .................................................................................................. 5
LEGISLATIVE MATERIALS
FTC Reauthorization: Hearing Before the Subcomm. on Consumer Affairs, Foreign Commerce and Tourism of the S. Comm. on Commerce, Science, and Transportation, 107th Cong. 27-28 (2002), available at http://www. gpo.gov/fdsys/pkg/CHRG-107shrg91729/pdf/CHRG-107shrg91729.pdf ....................... 16
H.R. Rep. No. 85-1048 (1957) ..................................................................................................... 11
Prepared Statement of the Federal Trade Commission, Before the Subcomm. on Commerce, Trade and Consumer Protection of the H. Comm. on Energy and Commerce, United States House of Representatives, 2003 WL 21353573 (June 11, 2003) ................................................................................................. 16
To Amend the Federal Trade Commission Act: Hearing on H.R. 3143 Before the H. Comm. on Interstate and Foreign Commerce, 75th Cong. 23 (1937) ................... 10, 11
OTHER MATERIALS AT&T, Broadband Information – Information About the Network Practices,
Performance Characteristics & Commercial Terms of AT&T’s Mass Market Broadband Internet Access Services, http://www.att.com/broadbandinfo ..................................................................................... 7
AT&T, Info for Smartphone Customers with Unlimited Data Plans, http://www.att.com/datainfo .............................................................................................. 7
Katy Bachman & Brooks Boliek, FTC, FCC Jostling Over Telecom Turf, Politico Pro (Oct. 30, 2014), available with registration at http://www.politicopro.com/story/tech/?id=40104 ........................................................... 15
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MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC CASE NO. 14-CV-04785-EMC PAGE v
Br. for Appellee/Respondents, Verizon v. FCC, No. 11-1355, 2012 WL 3962421 (D.C. Cir. filed Sept. 10, 2012) ........................................................................................ 5-6
Br. for the FTC in Opp., Verity Int’l, Ltd. v. FTC, No. 06-669 (U.S. filed Feb. 15, 2007), available at http://www.justice.gov/osg/briefs/2006/ 0responses/2006-0669.resp.pdf ......................................................................................... 14
Letters to Big Four Wireless Carriers Probe Intersection of Business, Engineering Practices, FCC Says, Comm. Daily (Aug. 12, 2014) .................................... 2
Press Release, AT&T, An Update for our Smartphone Customers with Unlimited Data Plans (July 29, 2011), available at http://www.att.com/gen/press-room?pid=20535&cdvn=news& newsarticleid=32318 ...................................................... 4
Jeff Roberts, Why a DC turf war may have played a part in the timing of the FTC’s mobile data lawsuit against AT&T, Gigaom (Oct. 28, 2014), https://gigaom.com/2014/10/28/why-a-dc-turf-war-may-have-played-a-part-in-the-timing-of-the-ftcs-mobile-data-lawsuit-against-att ......................................... 15
2A Norman J. Singer, Statutes and Statutory Construction (7th ed. 2013) .................................... 11
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MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC CASE NO. 14-CV-04785-EMC PAGE 1
NOTICE OF MOTION AND STATEMENT OF RELIEF SOUGHT
TO ALL PARTIES AND THEIR COUNSEL OF RECORD: Please take notice that
AT&T Mobility, LLC (“AT&T”) hereby files this motion to dismiss the Federal Trade
Commission’s (“FTC”) complaint. The motion will be heard on Thursday, March 12, 2015, at
1:30 p.m., before the Honorable Edward M. Chen.
Defendant AT&T seeks dismissal of the FTC’s complaint.
MEMORANDUM OF POINTS AND AUTHORITIES
STATEMENT OF THE ISSUE
Whether this Court possesses subject-matter jurisdiction over the FTC’s complaint,
notwithstanding the fact that 15 U.S.C. § 45(a)(2) deprives the FTC of regulatory jurisdiction over
“common carriers subject to the Acts to regulate commerce.”
INTRODUCTION
Pursuant to Federal Rule of Civil Procedure 12(b)(1), AT&T respectfully requests that the
Court dismiss the complaint because the FTC lacks authority to bring suit against AT&T. Section
5 of the Federal Trade Commission Act of 1914 (“FTC Act”) exempts from the Act’s coverage all
“common carriers subject to” the Communications Act of 1934 (“Communications Act”), 47
U.S.C. § 151 et seq. See 15 U.S.C. § 45(a)(2); id. § 44. This “common-carrier exemption” is
designed to ensure that entities already subject to another agency’s regulatory authority will not
face potentially inconsistent regulation under the more general terms of the FTC Act. AT&T is a
“common carrier[ ] subject to” the Communications Act because it offers its mobile voice plans to
customers on an indiscriminate basis without modifying the content of the information that
traverses its network. See 47 U.S.C. §§ 153(11), 332(c)(1). Accordingly, AT&T is not subject to
the FTC’s enforcement authority under Section 5.
Despite AT&T’s status as a common carrier, the FTC has asserted jurisdiction on the
ground that the exemption does not apply to AT&T’s mobile data services, which are not treated
as common carriage. This interpretation of the statute, however, is incorrect. As various courts
have held, and as the text, structure, and history of the FTC Act make clear, the relevant exemption
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MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC CASE NO. 14-CV-04785-EMC PAGE 2
in Section 5 focuses on the status of the regulated entity, not the particular activity in which it is
engaged. See, e.g., FTC v. Miller, 549 F.2d 452, 455 (7th Cir. 1977). Indeed, the FTC itself has
recognized that, as drafted, the exemption altogether removes common carriers such as AT&T
from its jurisdiction and has asked Congress to modify the statute. So far, Congress has refused.
In any event, the mobile data activities that the FTC is seeking to regulate are already
subject to regulation by the Federal Communications Commission (“FCC”). At issue here is
AT&T’s “maximum bit rate” (“MBR”) program, which is sometimes known as “throttling”
because it temporarily reduces the speed of mobile data consumption after users reach certain
monthly thresholds. AT&T implemented this network management program to preserve a high-
quality experience for all of its customers, by preventing heavy users of data from overwhelming
the mobile network and degrading service for all. It did so after the FCC identified throttling as a
type of network management that may be implemented consistent with the FCC’s Open Internet
principles and rules. See Open Internet Order1 ¶ 73. The FCC also imposed a transparency rule,
which requires providers of mobile broadband services to make certain public disclosures of their
network management practices, including throttling. See id. ¶¶ 53, 97.
Last summer, in a letter from its Chairman, the FCC sought from AT&T an explanation of
how AT&T’s MBR program complies with the FCC’s Open Internet rules.2 Thereafter, the FCC
sent a more detailed Letter of Inquiry to AT&T about its MBR program, to which AT&T provided
1 Report and Order, Preserving the Open Internet, 25 FCC Rcd 17905, ¶ 73 (2010) (“Open
Internet Order”) (“For example, during periods of congestion a broadband provider could provide more bandwidth to subscribers that have used the network less over some preceding period of time than to heavier users.”), vacated in part on other grounds, Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 2014).
2 Letter from Tom Wheeler, Chairman, FCC, to Ralph de la Vega, President and CEO, AT&T Mobility (Aug. 6, 2014), attached hereto as Exhibit 1. Similar letters were sent to the other three major wireless carriers regarding comparable programs at those firms. See Letters to Big Four Wireless Carriers Probe Intersection of Business, Engineering Practices, FCC Says, Comm. Daily (Aug. 12, 2014). AT&T responded to Chairman Wheeler’s letter on September 5, 2014. See Letter from Robert W. Quinn, Senior Vice President, Federal Regulatory, AT&T, to Tom Wheeler, Chairman, FCC [hereinafter Quinn Letter], attached hereto as Exhibit 2.
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MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC CASE NO. 14-CV-04785-EMC PAGE 3
an extensive response.3 The FCC’s Enforcement Bureau is now actively considering whether to
issue a Notice of Apparent Liability against AT&T alleging that AT&T’s public disclosures of its
MBR program failed to satisfy the FCC’s transparency rule and proposing statutory forfeitures.
The FTC seeks to litigate the very same issues in an inappropriate parallel proceeding. It
asserts in this lawsuit that AT&T’s imposition of MBR was unfair and that its disclosures were
inadequate. But whether AT&T’s network management program is “unfair” and whether its
disclosures were “inadequate” are issues for the FCC to decide, and in fact the FCC is in the
process of so deciding, just as Congress intended. Congress drafted Section 5 to avoid subjecting
common carriers like AT&T to precisely this sort of conflicting authority of separate federal
agencies over the same conduct. Applying the exemption in this case is thus particularly
appropriate because the FTC’s assertion of jurisdiction would contravene the essential purpose of
the exemption – to avoid overlapping regulatory jurisdiction.
FACTUAL BACKGROUND
A. AT&T’s MBR Program
AT&T is a retail provider of mobile telephone service that offers “the largest digital voice
and data network in America.” Compl. ¶ 9 & Ex. A-1. AT&T’s mobile wireless customers may
select voice service alone, or both voice and data service in a single plan. See id., Ex. A-2.
Customers who subscribe to AT&T’s data services may browse the Internet, send and receive
email, and utilize various other applications by using their smartphones to access AT&T’s
wireless network. See id. ¶ 9 & Ex. A-1. From 2007 to 2010, in conjunction with its voice
service, AT&T offered service plans that allowed its wireless customers to use unlimited data for a
fixed monthly price. See id. ¶ 10 & Ex. A-1. In all of its customer contracts, however, AT&T
reserved the right to limit or terminate wireless service if a customer’s use “adversely impacts
3 Letter from Theresa Z. Cavanaugh, Chief, Investigations and Hearings Div., Enforcement
Bureau, FCC, to Jackie Flemming, AT&T (Oct. 28, 2014) [hereinafter Letter of Inquiry], attached hereto as Exhibit 3.
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MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC CASE NO. 14-CV-04785-EMC PAGE 4
[AT&T’s] wireless network,” and to “protect its wireless network from harm,” even where those
protective steps “may impact legitimate data flows.”4
Following the introduction of the iPhone – and particularly following the launch of the
iPhone 3G in 2008 – data consumption on AT&T’s mobile network exploded. Basic broadband
transmissions such as corporate email were replaced by new “apps” that enabled rich web
browsing, turn-by-turn navigation, and streaming video. This revolution caused data usage on
AT&T’s network to increase 20,000 percent between 2007 and 2011. Quinn Letter at 2. In the
face of this overwhelming growth, AT&T discontinued its Unlimited Data plans in June 2010 for
new customers, but offered to grandfather existing customers so that they could continue their
Unlimited Data plans going forward. See Compl. ¶¶ 11-12.
Even after AT&T discontinued Unlimited Data plans prospectively, a small percentage of
grandfathered Unlimited Data plan customers continued to consume a disproportionate amount of
capacity on AT&T’s network. To address this ongoing resource challenge, AT&T announced its
MBR program in a July 2011 press release and implemented it three months later. See id. ¶ 15;
Press Release, AT&T, An Update for our Smartphone Customers with Unlimited Data Plans (July
29, 2011), available at http://www.att.com/gen/press-room?pid=20535&cdvn=news&
newsarticleid=32318. At first, AT&T temporarily reduced download speeds for those Unlimited
Data plan customers whose data consumption placed them in the top 5 percent of data-usage
customers in a given month. See Compl. ¶¶ 15-16, 35. In March 2012, AT&T modified the
program to reduce download speeds for any Unlimited Data plan customer whose data
consumption exceeded a fixed monthly threshold, and announced this change to its customers.
See id. ¶ 17. And, as of late June 2014, AT&T further refined the program for customers on its
third-generation network so that download speeds would be reduced for the heavy data users only
4 June 2007 Terms and Conditions; March 2008 Terms and Conditions; September 2010
Wireless Customer Agreement (“WCA”), § 6.2; see also, e.g., June 2007 Terms and Conditions (reserving the right to “limit throughput or amount of data transferred”); March 2008 Terms and Conditions (reserving the right to “modify” or “disconnect” service of users “whose usage adversely impacts [AT&T’s] wireless network including . . . after sessions of excessive usage”); August 2012 WCA § 6.2 (stating that “AT&T may engage in any reasonable network management practice . . . to reduce network congestion,” including the reduction of data throughput speeds).
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MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC CASE NO. 14-CV-04785-EMC PAGE 5
where such usage occurs in a congested area. Quinn Letter at 4. Once a customer leaves the area,
or the congestion subsides, the customer’s experience returns to normal.
B. AT&T’s Common-Carrier Status
At all relevant times, AT&T generally, and its network management and disclosure
practices specifically, have been subject to regulation by the FCC, the regulatory agency created
by the Communications Act of 1934 to “regulat[e] interstate and foreign commerce in
communication by wire and radio.” 47 U.S.C. § 151. The Communications Act includes
provisions – collected in Title II – that are specifically applicable to “common carriers.” See
generally id. § 201 et seq.5 Because AT&T is a provider of “commercial mobile service,” the
Communications Act treats AT&T as a common carrier. See id. § 332(c)(1). The FCC reached
that conclusion explicitly in the Broadband Classification Order,6 stating that a provider of
“traditional mobile voice service . . . is to be treated as a common carrier for the
telecommunications services it provides.” Broadband Classification Order ¶ 50; see also Cellco
P’ship v. FCC, 700 F.3d 534, 538 (D.C. Cir. 2012) (“mobile-voice providers are considered
common carriers”) (emphasis omitted); Roaming Obligations Order 7 ¶ 1 (“clarify[ing]” the
“common carrier obligation[s]” of mobile voice service providers).
The FCC classified mobile data services in the same order as “private mobile services,”
which are not subject to common-carrier services treatment under Title II of the Act. See
Broadband Classification Order ¶¶ 37-41 (citing § 332). But the FCC has nonetheless asserted
“plenary authority” over wireless data providers under Title III of the Act, which governs wireless
services generally. Br. for Appellee/Respondents at 20, 44, Verizon v. FCC, No. 11-1355, 2012
5 The Communications Act defines a “common carrier” as “any person engaged as a
common carrier for hire, in interstate or foreign communication by wire or radio or interstate or foreign radio transmission of energy, except where reference is made to common carriers not subject to this chapter.” 47 U.S.C. § 153(11).
6 Declaratory Ruling, Appropriate Regulatory Treatment for Broadband Access to the Internet Over Wireless Networks, 22 FCC Rcd 5901 (2007) (“Broadband Classification Order”).
7 Report and Order and Further Notice of Proposed Rulemaking, Reexamination of Roaming Obligations of Commercial Mobile Radio Service Providers, 22 FCC Rcd 15817 (2007) (“Roaming Obligations Order”).
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MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC CASE NO. 14-CV-04785-EMC PAGE 6
WL 3962421 (D.C. Cir. filed Sept. 10, 2012). Section 706 of the Telecommunications Act of
1996 provides the FCC with the additional regulatory authority to promote advanced
telecommunications capability, including wireless data. See 47 U.S.C. § 1302; Verizon v. FCC,
740 F.3d 623, 636-42 (D.C. Cir. 2014).
The FCC’s Open Internet regulations governing mobile data services were adopted in
2010, and applied, inter alia, to network management practices aimed at “reducing or mitigating
the effects of congestion on the network.” Open Internet Order ¶ 82. In the Open Internet Order,
the FCC established an anti-blocking rule that precluded AT&T and other mobile carriers from
preventing their customers from accessing lawful websites on their mobile devices and from
blocking certain applications that compete with their own services.8 At the same time, the FCC
established a regime of “reasonable” and flexible network management that allowed AT&T and
other carriers to manage their networks so as to avoid network congestion resulting from excessive
data usage:
The FCC recognized the need for “reasonable network management” programs because “existing mobile networks present operational constraints that fixed broadband networks do not typically encounter.” Open Internet Order ¶ 95.
The FCC concluded that “congestion management may be a legitimate network management purpose” and that “broadband providers may need to take reasonable steps to ensure that heavy users do not crowd out others.” Id. ¶ 91.
The FCC found that a wireless carrier’s efforts “to . . . reduce or mitigate the effects of congestion on its network or to address quality-of-service concerns” are reasonable practices. Id. ¶ 81.
The FCC approved the network management policy of providing “more bandwidth to subscribers that have used the network less over some preceding period of time than to heavier users” to reduce congestion. Id. ¶ 73.
The Open Internet Order also imposed transparency and disclosure regulations “applicable
to all mobile broadband providers” designed to “ensur[e] that end users have sufficient
information to make informed choices regarding use of the network.” Id. ¶ 97; see id. ¶ 53
(requiring “[e]ffective disclosure of broadband providers’ network management practices and the
performance and commercial terms of their services,” for both wireline and wireless access to the
8 See 47 C.F.R. § 8.5 (2013).
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MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC CASE NO. 14-CV-04785-EMC PAGE 7
Internet). The FCC’s rule thus allowed certain specific network management techniques while
also imposing disclosure requirements.9 The Open Internet Order provides further specificity:
Mobile broadband providers must “clearly explain their criteria for any restrictions on use of their network[s],” including any “congestion management practices,” the “types of traffic subject to practices,” the “purposes served by [those] practices,” the “criteria used in [those] practices, such as indicators of congestion that trigger a practice,” the “usage limits and consequences of exceeding them,” and “references to engineering standards, where appropriate.” Open Internet Order ¶¶ 56, 98.
Mobile broadband providers must “prominently display or provide links to disclosures on a publicly available, easily accessible website that is available to current and prospective end users.” Id. ¶ 57.
Any “relevant information” regarding broadband providers’ network management practices – including congestion management practices – must be disclosed “at the point of sale.” Id.
In its ruling on the FCC’s Open Internet Order, the D.C. Circuit upheld the FCC’s authority to
impose network management rules on broadband data services under Section 706, left undisturbed
the FCC’s finding that MBR-type programs constitute reasonable network management, and
upheld the FCC’s transparency rule – the very issues that, as discussed below, the FTC is seeking
to regulate here. See Verizon v. FCC, 740 F.3d at 637, 659. The anti-blocking rule was vacated.
Id. at 659.
In November 2011, concurrent with its implementation of MBR, AT&T complied with the
FCC’s notice requirements by setting forth on its website the mandated disclosures concerning its
network management practices for mobile data. See Open Internet Order ¶ 57.10 And AT&T took
the further step of disclosing its congestion management practices to Unlimited Data plan
customers through a second webpage devoted to explaining its MBR program.11
9 The FCC’s rule states that “[a] person engaged in the provision of broadband Internet
access service shall publicly disclose accurate information regarding the network management practices, performance and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices.” 47 C.F.R. § 8.3.
10 See, e.g., AT&T, Broadband Information – Information About the Network Practices, Performance Characteristics & Commercial Terms of AT&T’s Mass Market Broadband Internet Access Services, http://www.att.com/broadbandinfo (describing AT&T’s “Network Practices” with respect to wired and mobile services, including its “process to reduce the data throughput speed experienced by a very small minority of smartphone customers who are on unlimited plans”).
11 AT&T, Info for Smartphone Customers with Unlimited Data Plans, http://www.att.com/datainfo.
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C. The FCC’s MBR Inquiry
On August 6, 2014, the Chairman of the FCC sent a letter to the President of AT&T
Mobility asking about AT&T’s MBR program. The Chairman listed two issues for which he
wanted responses. First, he asked for the rationale for treating customers differently in terms of
speed reductions based on the plan to which they subscribe, and whether that treatment was
consistent with the FCC’s network management rules. Second, he wanted an explanation of
whether the MBR program complies with the transparency requirements of the Open Internet
rules. The other three major wireless carriers received similar letters.12 AT&T sent a detailed
response to the Chairman’s letter on September 5, 2014.13
Thereafter, on October 28, 2014, the Chief of the Investigations and Hearings Division of
the FCC’s Enforcement Bureau sent an official Letter of Inquiry to AT&T requesting extensive
documents and detailed information about AT&T’s MBR program. The stated purpose of the
inquiry was to determine whether the MBR program “may have violated” the Commission’s Open
Internet rules, including the public-disclosure requirements pertaining to network management
practices. Letter of Inquiry at 1. AT&T provided the documents and a detailed response to the
questions on November 10, 2014, and, as noted, the FCC is now actively considering issuing a
Notice of Apparent Liability against, and seeking a statutory forfeiture from, AT&T.
D. The FTC Complaint
On the same day that the FCC issued its Letter of Inquiry to AT&T, the FTC filed suit
against AT&T based on its MBR program. The complaint sets forth two counts under Section 5
of the FTC Act, 15 U.S.C. § 45. The first count – for “Unfair Mobile Data Throttling Program” –
asserts that, notwithstanding “mobile data contracts that were advertised as providing access to
unlimited mobile data,” AT&T “imposed significant data speed restrictions on customers who
used more than a fixed amount of data in a given billing cycle.” Compl. ¶¶ 45-46. The second
count, entitled “Deceptive Failure to Disclose Mobile Data Throttling Program,” asserts that
12 See supra note 2.
13 See Quinn Letter.
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MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC CASE NO. 14-CV-04785-EMC PAGE 9
AT&T has “represented, directly or indirectly, expressly or by implication,” that “the amount of
data that [unlimited data customers] could access in any billing period would not be limited,” and
that, “[s]ince August 2011, Defendant has failed to disclose, or has failed to disclose adequately,
that it imposes significant and material data speed restrictions on unlimited mobile data plan
customers who use more than a fixed amount of data in a given billing cycle.” Id. ¶¶ 48-49. The
complaint claims subject-matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337(a), and 1345,
and 15 U.S.C. §§ 45(a) and 53(b). Id. ¶ 2.
ARGUMENT
I. AT&T Is Exempt from Section 5 of the FTC Act Because It Is a Common Carrier Subject to the Communications Act
The FTC lacks jurisdiction to prosecute this action because AT&T is a common carrier
subject to the Communications Act and therefore outside the FTC’s authority under Section 5 of
the FTC Act. 15 U.S.C. § 45(a)(2). Section 45(a)(2) states: The [FTC] is hereby empowered and directed to prevent persons, partnerships, or corporations, except banks, savings and loan institutions described in section 57a(f )(3) of this title, Federal credit unions described in section 57a(f )(4) of this title, common carriers subject to the Acts to regulate commerce, air carriers and foreign air carriers subject to part A of subtitle VII of title 49, and persons, partnerships, or corporations insofar as they are subject to the Packers and Stockyards Act, 1921, as amended [7 U.S.C. 181 et seq.], except as provided in section 406(b) of said Act [7 U.S.C. 227 (b)], from using unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce.
Id. (emphases added; first set of brackets added). The FTC Act specifically defines “ ‘Acts to
regulate commerce’” to include “the Communications Act of 1934 [47 U.S.C. § 151 et seq.] and
all Acts amendatory thereof and supplementary thereto.” 15 U.S.C. § 44. AT&T plainly qualifies
as a “common carrier” for purposes of Section 5 because it provides mobile voice services subject
to common-carrier regulation under Title II of the Communications Act.
The fact that AT&T’s mobile data services are not regulated as common-carrier services
under the Communications Act is irrelevant. The text, structure, history, and purpose of Section 5
leave no doubt that its common-carrier exemption turns on an entity’s “status as a common carrier
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MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC CASE NO. 14-CV-04785-EMC PAGE 10
subject to [an Act to regulate commerce],” not its “activities subject to regulation under that Act.”
FTC v. Miller, 549 F.2d 452, 455 (7th Cir. 1977) (emphases added).
Thus, Section 5 defines the FTC’s jurisdiction in terms of specific entities – namely,
“persons, partnerships, or corporations.” 15 U.S.C. § 45(a)(2). Among such “persons . . . or
corporations,” Congress exempted “banks, savings and loan institutions described in Section
57a(f )(3) of this title,” “Federal credit unions described in section 57a(f )(4) of this title,”
“common carriers subject to the Acts to regulate commerce,” and “air carriers and foreign air
carriers subject to part A of subtitle VII of title 49.” And Congress crafted this exemption without
reference to the activities in which these entities engage. Id. The common-carrier exemption by
its terms thus exempts entities, not just certain activities engaged in by those entities, from the
coverage of the FTC Act.
The legislative history of the amendments to Section 5 underscores this point. After
Congress passed the Communications Act in 1934, it amended the FTC Act in 1938, expressly to
exempt common carriers subject to the Communications Act. See Wheeler-Lea Act, Pub. L. No.
75-447, § 3, 52 Stat. 111, 111 (1938). In deliberations preceding the amendment, Congress
contemplated – but did not adopt – statutory language providing “that common carriers under the
[Communications] [A]ct are excepted as common carriers under [the FTC] [A]ct only in respect of
their common-carrier operations.” To Amend the Federal Trade Commission Act: Hearing on
H.R. 3143 Before the H. Comm. on Interstate and Foreign Commerce, 75th Cong. 23, 25 (1937)
[hereinafter Hearing Tr.] (emphasis added). The purpose of that proposal was to qualify that,
“where common carriers engage in activities that are not in the common carrier field, beyond the
field that the Government is regulating, then and in that case, they are subject to the jurisdiction of
the Federal Trade Commission.” Id. at 26. But that text was not incorporated into the final
version of the law. Instead, Congress adopted the language we have today, which flatly exempts
common carriers from the FTC’s jurisdiction on an entity-by-entity basis.
This interpretation is further confirmed by contrasting the common-carrier exemption with
the language and history of Section 5’s exemption related to the Packers and Stockyards Act.
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MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC CASE NO. 14-CV-04785-EMC PAGE 11
When Congress amended the FTC Act in 1938, Section 5 also exempted “persons, partnerships, or
corporations subject to the Packers and Stockyards Act.” Wheeler-Lea Act § 3. But, in 1958,
Congress amended that clause to exempt companies only “insofar as they are subject to the
Packers and Stockyards Act,” thus preserving FTC enforcement authority with respect to activities
that are not subject to the Packers and Stockyards Act – even if the company engaging in those
activities is, at other times, subject to that Act. Pub. L. No. 85-909, § 3, 72 Stat. 1749, 1750
(1958) (codified as amended at 15 U.S.C. § 45(a)(2)) (emphasis added). Contrasting the amended
activity-specific language of the Packers and Stockyards Act exemption with the status-linked
language of the common-carrier exemption (and the original Packers and Stockyards exemption)
shows that Congress made a deliberate choice to treat the two exemptions differently. “[W]hen
the legislature uses certain language in one part of the statute and different language in another,
[courts] assume[] different meanings were intended.” Sosa v. Alvarez-Machain, 542 U.S. 692,
711 n.9 (2004) (internal quotation marks omitted).
The presumption of different meanings has particular force here. By literally replacing a
status-based exemption for entities subject to the Packers and Stockyards Act with an activity-
based exemption twenty years later, Congress made inescapably clear that it distinguishes between
the two. Cf. United States v. Stevenson, 215 U.S. 190, 198 (1909) (“It is not to be presumed that
this change is meaningless, and that Congress had no purpose in making it.”). Congress
understood that the first incarnation of the Packers and Stockyards Act exemption – and thus the
enduring language of the common-carrier exemption – created an entity-by-entity exemption. See
H.R. Rep. No. 85-1048, at 6 (1957). Congress easily could have drafted (or amended) the
common-carrier exemption to apply only to common carriers “insofar as they are engaged in
common carriage subject to the Acts to regulate commerce.” Indeed, as noted, Congress had before
it a proposal to exempt common carriers “only in respect of their common carrier operations.”
Hearing Tr. 23, 25. But Congress did not adopt that language, indicating “that the legislature
[did] not intend the bill to include the provisions embodied in the rejected amendment.” 2A
Norman J. Singer, Statutes and Statutory Construction § 48:18 (7th ed. 2013); see Russello v.
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United States, 464 U.S. 16, 23-24 (1983) (“Where Congress includes limiting language in an
earlier version of a bill but deletes it prior to enactment, it may be presumed that the limitation was
not intended.”).
By adopting a status-based exemption, Congress “demonstrated its adherence to its
traditional policy of dividing regulatory responsibilities along industry lines, rather than, as the
FTC suggests, on the basis of particular activities.” Miller, 549 F.2d at 459. The enactment of the
Communications Act in 1934 – 20 years after the 1914 FTC Act – reflected Congress’s
determination that “a more effective execution” of national communications policy would best be
served “by centralizing authority heretofore granted by law to several agencies.” 47 U.S.C. § 151.
“The [FCC] was expected to serve as the single Government agency with uniform jurisdiction and
regulatory power over all forms of electrical communication, whether by telephone, telegraph,
cable, or radio.” United States v. Southwestern Cable Co., 392 U.S. 157, 167-68 (1968) (internal
quotation marks and footnotes omitted). The purpose of the “common-carrier exemption” is thus to
“prevent[ ] interagency conflict” that would arise if the FTC regulated industries that are already
subject to the authority of specialized agencies such as the FCC. FTC v. Verity Int’l, Ltd., 443
F.3d 48, 57 (2d Cir. 2006) (“Verity II”); see also Miller, 549 F.2d at 457.
II. The Case Law Is Consistent on the Meaning of the Exemption
In the 100 years of the FTC’s existence, no court has authorized the FTC to assert
jurisdiction over a common carrier. Thus, in FTC v. Miller, the Seventh Circuit rejected the
FTC’s argument that, for purposes of the jurisdictional exemption, the relevant inquiry is whether
“the particular activity in question” is subject to regulation by the other agency. 549 F.2d at 457.
Instead, the court recognized that, in the case of a company engaged in the business of transporting
mobile homes and subject to regulation as a common carrier under the Interstate Commerce Act,
“the words of the [FTC] Act plainly exempt from the [FTC’s] investigatory jurisdiction any
corporation holding the status of a common carrier regulated by the [Interstate Commerce
Commission (‘ICC’)].” Id. at 456-57 (emphasis added). The court accordingly rejected the FTC’s
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attempt to assert jurisdiction over advertising activities that it argued fell outside the scope of ICC
regulation.14
The FTC itself has not hesitated to advance this status-based argument when doing so
leads to an expansion of its jurisdiction. For example, the FTC successfully argued that a non-
common carrier engaged in common carrier-like activities is not entitled to the benefit of the
jurisdictional exemption; what matters is the status of the company in question, not the activities it
performs. See Official Airline Guides, Inc. v. FTC, 630 F.2d 920, 923 (2d Cir. 1980) (“[I]t is of no
significance that the publishing of airline schedules is an activity affecting competition among air
carriers subject to the Federal Aviation Act. Since Donnelley is not itself an air carrier, it is not
beyond the [FTC’s] jurisdiction.”); FTC v. American Standard Credit Sys., Inc., 874 F. Supp.
1080, 1086 (C.D. Cal. 1994) (finding that alleged agent of bank, despite engaging in banking
activities, did not fit Section 5’s exemption because it lacked the status of “banks, savings and
loan institutions”); National Fed’n of Blind v. FTC, 303 F. Supp. 2d 707, 714-15 (D. Md. 2004)
(telefunders can be regulated by the FTC, “regardless of the fact that they engage in the same
activities as the nonprofits [which are outside of the FTC’s jurisdiction],” because “[c]ourts have
held that an entity’s exemption from FTC jurisdiction is based on that entity’s status, not its
activity”), aff ’d, 420 F.3d 331 (4th Cir. 2005); FTC v. CompuCredit Corp., No. 1:08-CV-1976-
BBM-RGV, 2008 WL 8762850, at *1, *3-4 (N.D. Ga. Oct. 8, 2008) (finding that non-bank which
“perform[ed] contractual services for banks” such as “market[ing] subprime credit cards to
consumers” was not subject to Section 5’s exemption of “banks, savings and loan institutions,”
and endorsing the FTC’s argument that “the exemptions in § 45(a)(2) are focused on the status of
the entity claiming exemption and not the activities of the entity”); cf. FTC v. Saja, No. Civ-97-
0666-PHX-SMM, 1997 WL 703399, at *2 (D. Ariz. Oct. 7, 1997) (finding that “Defendants’
14 In Miller, the FTC did not contend that the advertising activities of the company in
question were non-common-carrier activities. Rather, the FTC argued that these activities were simply not ones that the ICC would regulate and so the purpose of the exemption – to avoid interagency conflict – was not implicated. But, in rejecting this argument, the court emphasized that it was the status of the company as a common carrier subject to the ICC’s regulation – not the particular nature of the activities in question – that mattered for purposes of applying the exemption. No court of appeals has ever held otherwise.
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MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC CASE NO. 14-CV-04785-EMC PAGE 14
status, in part, as fundraisers for not-for-profit organization[s] does not create not-for-profit status”
for purposes of the exemption). The FTC has even held, in an administrative proceeding, that
“Section 5(a)(2) specifically lists categories of businesses whose acts and practices are not subject
to the Commission’s authority under the FTC Act.” Order, LabMD, Inc., No. 9357, 2014 WL
253518, at *10 (F.T.C. Jan. 16, 2014) (emphasis added).
The only case even arguably supporting a contrary reading of Section 5 is the district
court’s decision in FTC v. Verity International, Ltd., 194 F. Supp. 2d 270 (S.D.N.Y. 2002)
(“Verity I”). The court there stated that the common-carrier exemption “depends on the particular
activity at issue,” rather than on the “status” of the entity. Id. at 275-76. No other court has
endorsed such a misreading of Section 5, and the Second Circuit declined to affirm on the same
basis as the district court, finding instead that the defendant was not a common carrier at all. See
Verity II, 443 F.3d at 58-60. Indeed, the Solicitor General, on behalf of the FTC, opposed
certiorari by noting that “[t]he court of appeals expressly assumed that the relevant question was
whether [the defendant] had the status of a common carrier” and asserting that the Second Circuit
was “clearly correct” in finding that the defendant “lacked that status.” Br. for the FTC in Opp.
at 7, Verity Int’l, Ltd. v. FTC, No. 06-669 (U.S. filed Feb. 15, 2007), available at
http://www.justice.gov/osg/briefs/2006/0responses/2006-0669.resp.pdf.
III. Mobile Broadband Data Service Is Already Subject to FCC Regulation
Even though mobile broadband data services are not currently treated as common carriage,
they are still subject to FCC authority under Title III of the Communications Act and Section 706
of the Telecommunications Act. Indeed, as already indicated, the FCC has opened an
investigation into whether AT&T’s MBR program complies with its rules governing mobile data
services, and has since indicated that it may file and adjudicate its own complaint against AT&T.
The FTC’s attempt to assert jurisdiction here would thus create precisely the overlapping
jurisdiction that Congress sought to avoid.
The FCC issued its Open Internet Order in December 2010, almost a full year before
AT&T imposed its MBR program. AT&T relied on that Order in determining both the
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reasonableness of its network practices and the adequacy of its consumer disclosures. If these
same network management practices and consumer disclosures are now to be subject to an FTC
enforcement action, then wireless carriers would be exposed to just the kind of overlapping and
potentially conflicting regulation that Congress sought to prevent with the Section 5 exemption.15
Indeed, the potential for such overlapping and conflicting regulation has become especially acute
in light of the imminent FCC proceeding to determine the compatibility of AT&T’s MBR program
with the Commission’s Open Internet rules. The FTC is attempting to brand as “unfair” a program
that AT&T believes was a permissible network management tool under the FCC’s Open Internet
Order. And the FTC is attempting to brand as “inadequate” disclosures that AT&T believes fully
complied with the FCC’s transparency requirements. The FCC has indicated that it will adjudicate
these issues. As a prior Chairman of the FCC noted in commenting on this suit, “What the Federal
Trade Commission has done, they’re basically stepping onto the turf of the Federal
Communications Commission.”16
IV. The FTC Cannot Rewrite the Statute To Expand Its Own Jurisdiction
Finally, the FTC is well aware that Section 5, as drafted, withholds authority to regulate
AT&T and other common carriers, and that is why it has repeatedly (though unsuccessfully)
lobbied Congress to repeal the common-carrier exemption. In 2002, an FTC commissioner stated
that the Section 5 exemption hinders its ability to regulate “business activities of
telecommunications firms [that] have now expanded far beyond common carriage,” such as
15 The FCC has ample authority to ensure compliance with its regulations, including
forfeiture penalties, see 47 U.S.C. § 503(b), and it has not been reluctant to exercise such authority. See generally Action for Children’s Television v. FCC, 59 F.3d 1249, 1253 (D.C. Cir. 1995) (describing the FCC’s “enforcement scheme,” including 47 U.S.C. § 503, which “govern[s] all types of forfeitures”); Comtronics, Inc. v. Puerto Rico Tel. Co., 553 F.2d 701, 704 (1st Cir. 1977) (describing the FCC’s “enforcement power” with respect to seeking “penalties for violations of FCC orders”); Progressive Cellular III B-3 v. FCC, 986 F.2d 546 (D.C. Cir. 1993) (Table) (noting the “FCC’s rigorous enforcement of its hard-nosed rules, even where enforcement produces a harsh result”) (internal quotation marks and citation omitted).
16 Katy Bachman & Brooks Boliek, FTC, FCC Jostling Over Telecom Turf, Politico Pro (Oct. 30, 2014), available with registration at http://www.politicopro.com/story/tech/?id=40104; see also Jeff Roberts, Why a DC turf war may have played a part in the timing of the FTC’s mobile data lawsuit against AT&T, Gigaom (Oct. 28, 2014), https://gigaom.com/2014/10/28/why-a-dc-turf-war-may-have-played-a-part-in-the-timing-of-the-ftcs-mobile-data-lawsuit-against-att.
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“Internet services,” and urged Congress to repeal the exemption so the agency would not be
“forced to” “litigat[e] this issue” in court.17 In 2003, the FTC informed a House subcommittee
that the exemption “hamper[s] the FTC’s oversight of the non-common-carrier activities” of
common carriers.18 And in November 2011, FTC Commissioner J. Thomas Rosch acknowledged
the strong arguments that “constrain[ ]” the agency’s jurisdiction over mobile data.19 The FCC’s
decision not to classify data services as common carriage, Commissioner Rosch explained, “does
not necessarily mean that the service is therefore subject to regulation by . . . the FTC.” “[W]e get
our jurisdiction directly from Congress . . . not from another agency.” 20
As the FTC’s own unsuccessful pleas to Congress make plain, its proposed reading of
Section 5 is foreclosed by the language of the statute. The FTC may not now seek to exercise the
very jurisdiction that Congress has consistently declined to grant it. See, e.g., City of Arlington v.
FCC, 133 S. Ct. 1863, 1874 (2013) (“Where Congress has established a clear line, the agency
17 FTC Reauthorization: Hearing Before the Subcomm. on Consumer Affairs, Foreign
Commerce and Tourism of the S. Comm. on Commerce, Science, and Transportation, 107th Cong. 27-28 (2002) (statement of FTC Commissioner Sheila F. Anthony), available at http://www.gpo.gov/fdsys/pkg/CHRG-107shrg91729/pdf/CHRG-107shrg91729.pdf.
18 Prepared Statement of the Federal Trade Commission, Before the Subcomm. on Commerce, Trade and Consumer Protection of the H. Comm. on Energy and Commerce, 2003 WL 21353573, at *19 (June 11, 2003).
19 “Neutral on Internet Neutrality: Should There Be a Role for the Federal Trade Commission?,” Remarks of J. Thomas Rosch, Commissioner, FTC, Before the Global Forum 2011: Vision for the Digital Future 11-15 (Nov. 7, 2011), available at http://www.ftc.gov/ sites/default/files/documents/public_statements/neutral-internet-neutrality-should-there-be-role-federal-trade-commission/111107globalforum.pdf.
20 Id. at 12. For this reason, the FTC’s assertion of jurisdiction fares no better even if the FCC purports to support the FTC’s action. It is well established that one agency may not cede jurisdiction to another. See Textile & Apparel Grp., Am. Importers Ass’n v. FTC, 410 F.2d 1052, 1057-58 (D.C. Cir. 1969) (footnote omitted) (“[T]he Commission’s argument runs afoul of the general principle that authority committed to one agency should not be exercised by another. The reason for this is that Congress delegates to one agency certain authority, perhaps because it feels that agency is the most capable of exercising it. . . . Further, the political realities are often such that Congress has chosen a particular agency with a particular orientation toward a problem; the proper place for interested parties to get a different agency . . . to handle the job is back in Congress.”); Shook v. D.C. Fin. Responsibility & Mgmt. Assistance Auth., 132 F.3d 775, 783 (D.C. Cir. 1998) (“[I]t would be unusual, if not unprecedented, for Congress to authorize the Board of Education to delegate its own governing authority, its policymaking function, to another outside multi-member body. That sort of delegation is inconsistent with the grant of overall authority to the Board of Education . . . .”).
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MOTION TO DISMISS BY DEFENDANT AT&T MOBILITY, LLC CASE NO. 14-CV-04785-EMC PAGE 17
cannot go beyond it; and where Congress has established an ambiguous line, the agency can go no
further than the ambiguity will fairly allow.”); Lousiana Pub. Serv. Comm’n v. FCC, 476 U.S.
355, 374-75 (1986) (“An agency may not confer power upon itself. To permit an agency to
expand its power in the face of a congressional limitation on its jurisdiction would be to grant to
the agency power to override Congress. This we are both unwilling and unable to do.”); American
Bankers Ass’n v. SEC, 804 F.2d 739, 754-55 (D.C. Cir. 1986) (“The whole point of the bank
exclusion clauses in the definitions of ‘broker’ and ‘dealer’ is to place banks outside the broker-
dealer jurisdiction of the SEC and leave them to the jurisdiction of banking regulators alone. The
SEC cannot use its definitional authority to expand its own jurisdiction and to invade the
jurisdiction of other agencies, including the Board of Governors.”).
CONCLUSION
For the reasons set forth above, AT&T respectfully requests that the Court dismiss this
action pursuant to Federal Rule of Civil Procedure 12(b)(1).
Dated: January 5, 2015 Respectfully submitted,
KELLOGG, HUBER, HANSEN, TODD, EVANS & FIGEL, P.L.L.C. By: /s/ Michael K. Kellogg Michael K. Kellogg Attorney for Defendant AT&T Mobility, LLC
Case3:14-cv-04785-EMC Document29 Filed01/05/15 Page23 of 23
